diff --git a/src/main/scala/zio/intellij/intentions/suggestions/SuggestTypeAlias.scala b/src/main/scala/zio/intellij/intentions/suggestions/SuggestTypeAlias.scala
index b57b6fb9..71849059 100644
--- a/src/main/scala/zio/intellij/intentions/suggestions/SuggestTypeAlias.scala
+++ b/src/main/scala/zio/intellij/intentions/suggestions/SuggestTypeAlias.scala
@@ -4,22 +4,25 @@ import com.intellij.codeInsight.intention.preview.IntentionPreviewInfo
 import com.intellij.openapi.editor.Editor
 import com.intellij.openapi.project.Project
 import com.intellij.psi.search.GlobalSearchScope
-import com.intellij.psi.{PsiElement, PsiFile}
+import com.intellij.psi.{PsiClass, PsiElement, PsiFile, PsiNamedElement, PsiPackage}
 import org.jetbrains.plugins.scala.codeInsight.intention.types.AbstractTypeAnnotationIntention.complete
 import org.jetbrains.plugins.scala.codeInsight.intention.types.{startTemplate, ChooseTypeTextExpression}
 import org.jetbrains.plugins.scala.extensions._
 import org.jetbrains.plugins.scala.lang.psi.ScalaPsiUtil
 import org.jetbrains.plugins.scala.lang.psi.api.base.types.{ScSimpleTypeElement, ScTypeElement}
 import org.jetbrains.plugins.scala.lang.psi.api.statements.{ScTypeAlias, ScTypeAliasDefinition}
-import org.jetbrains.plugins.scala.lang.psi.api.toplevel.typedef.{ScObject, ScTypeDefinition}
+import org.jetbrains.plugins.scala.lang.psi.api.toplevel.typedef.{ScMember, ScObject, ScTypeDefinition}
 import org.jetbrains.plugins.scala.lang.psi.impl.ScalaPsiManager
 import org.jetbrains.plugins.scala.lang.psi.types.api.designator.ScDesignatorType
-import org.jetbrains.plugins.scala.lang.psi.types.api.presentation.ScTypeText
-import org.jetbrains.plugins.scala.lang.psi.types.api.{ParameterizedType, UndefinedType}
+import org.jetbrains.plugins.scala.lang.psi.types.api.presentation.TypePresentation.PresentationOptions
+import org.jetbrains.plugins.scala.lang.psi.types.api.presentation.{NameRenderer, ScTypeText, TypePresentation}
+import org.jetbrains.plugins.scala.lang.psi.types.api.{ParameterizedType, UndefinedType, ValueType}
 import org.jetbrains.plugins.scala.lang.psi.types.recursiveUpdate.ScSubstitutor
 import org.jetbrains.plugins.scala.lang.psi.types.result.Typeable
-import org.jetbrains.plugins.scala.lang.psi.types.{AliasType, ScType, TypePresentationContext}
+import org.jetbrains.plugins.scala.lang.psi.types.{AliasType, ScType, ScalaTypeVisitor, TypePresentationContext}
+import org.jetbrains.plugins.scala.lang.refactoring.util.ScalaNamesUtil
 import org.jetbrains.plugins.scala.project.ProjectContext
+import org.jetbrains.plugins.scala.settings.ScalaApplicationSettings
 import org.jetbrains.plugins.scala.util.IntentionAvailabilityChecker.checkIntention
 import zio.intellij.intentions.ZTypeAnnotationIntention
 import zio.intellij.utils.TypeCheckUtils.{fromZioLayer, fromZioLike}
@@ -85,7 +88,7 @@ object SuggestTypeAlias {
     (topLevelType(declaredType) +: matchingAliases).distinct
   }
 
-  def topLevelType(tpe: ScType): ScType =
+  private def topLevelType(tpe: ScType): ScType =
     tpe.aliasType match {
       case Some(AliasType(_, _, Right(value))) => value
       case _                                   => tpe
@@ -104,7 +107,66 @@ object SuggestTypeAlias {
       undefSubst(aliasType)
         .conformanceSubstitutor(tpe)
         .map(subst => subst.apply(ParameterizedType(ScDesignatorType(alias), undefParams)))
-        .collect { case t: ScType if checker(t) => t }
+        .collect { case t: ScType if checker(t) => canonicalTextHack(t) }
     }
   }
+
+  private def canonicalTextHack(tpe: ScType): ScType = new ScType {
+    private val isPreciseText = ScalaApplicationSettings.getInstance().PRECISE_TEXT
+
+    override def isValue: Boolean = tpe.isValue
+
+    override def inferValueType: ValueType = tpe.inferValueType
+
+    override def visitType(visitor: ScalaTypeVisitor): Unit = tpe.visitType(visitor)
+
+    override implicit def projectContext: ProjectContext = tpe.projectContext
+
+    // TODO temp hack: restores the old behavior of canonicalText from before this change:
+    // https://github.com/JetBrains/intellij-scala/commit/0669994c02f3eb15d9c67f09f9c696227c83060f
+    // which caused some type aliases to be displayed as e.g `zioIO` instead of `zio.IO`
+    override def canonicalText(context: TypePresentationContext): String = {
+      val renderer: NameRenderer = new NameRenderer {
+        override def renderName(e: PsiNamedElement): String          = nameFun(e, withPoint = false)
+        override def renderNameWithPoint(e: PsiNamedElement): String = nameFun(e, withPoint = true)
+
+        private def nameFun(e: PsiNamedElement, withPoint: Boolean): String = {
+          val str = e match {
+            case c: PsiClass =>
+              val qname = c.qualifiedName
+              if (qname == null || (!isPreciseText && qname == c.name)) c.name // SCL-21184
+              else "_root_." + qname
+            case p: PsiPackage =>
+              "_root_." + p.getQualifiedName
+            case _ =>
+              e.nameContext match {
+                case m: ScMember =>
+                  m.containingClass match {
+                    case o: ScObject =>
+                      (if (isPreciseText && o.isStatic) "_root_." else "") + nameFun(
+                        o,
+                        withPoint = true
+                      ) + e.name // SCL-21182
+                    case _ => e.name
+                  }
+                case _ => e.name
+              }
+          }
+          removeKeywords(str) + pointStr(withPoint)
+        }
+      }
+
+      typeSystem.typeText(tpe, renderer, PresentationOptions(renderStdTypes = isPreciseText, canonicalForm = true))(
+        context
+      )
+    }
+
+    override def presentableText(implicit context: TypePresentationContext): String = tpe.presentableText
+
+    private def removeKeywords(text: String): String =
+      ScalaNamesUtil.escapeKeywordsFqn(text)
+
+    private def pointStr(withPoint: Boolean): String =
+      if (withPoint) "." else ""
+  }
 }